Merrill Lynch

Obama Asks NY Governor Paterson To Withdraw From Reelection Race, Paterson Refuses, Cuomo To Be “Promoted” Shortly

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Related article: Eliot Spitzer: Federal Reserve is a Ponzi scheme, an inside job:
The Federal Reserve – the quasi-autonomous body that controls the US’s money supply – is a “Ponzi scheme” that created “bubble after bubble” in the US economy and needs to be held accountable for its actions, says Eliot Spitzer, the former governor and attorney-general of New York.

Is a political scandal brewing in New York? A year and a half after taking over for a disgraced Spitzer, Paterson is now at war with everyone, but most notable the New York State Budget, and now, the President.

Reports the New York Times:

President Obama has sent a request to Gov. David A. Paterson that he withdraw from the New York governor’s race, fearing that Mr. Paterson cannot recover from his dismal political standing, according to two senior administration officials and a New York Democratic operative with direct knowledge of the situation.
The decision to ask Mr. Paterson to step aside was proposed by political advisers to Mr. Obama, but approved by the president himself, one of the administration officials said.
“Is there concern about the situation in New York? Absolutely,” the second administration official said Saturday evening. “Has that concern been conveyed to the governor? Yes.”
The president’s request was conveyed to the Mr. Paterson by Representative Gregory W. Meeks, a Queens Democrat, who has developed a strong relationship with the Obama administration, they said.

Yet Paterson seems unwilling to pull a Perella-Weinberg just yet:

“The message the White House wanted to send – that it wants Paterson to step aside – was delivered,” said the Democratic operative,, who spoke on condition of anonymity because the discussions were intended to be confidential. “He is resistant.”

What is the reason for this escalation? Simple – Bank Of America, and SEC-gate. Throw in some potential race issues, and you have one clusterfuck of a situation about to develop:

Now, Mr. Cuomo effectively has the blessing of the nation’s first black president to run against New York’s first black governor. That will probably neutralize any criticism he may face among the governor’s prominent black allies, including Representative Charles B. Rangel of Harlem, who warned this year that the party would become racially polarized if Mr. Cuomo took on Mr. Paterson.

With Andrew Cuomo now elbow deep in the Merrill bonus investigation, and likely about to file criminal charges against Ken Lewis any minute, what better way to shut him up than to promote him immediately to the post he will obtain sooner or later anyway. If in the meantime, the Faustian bargain between Lewis and Paulson/Bernanke can be retained without Lewis actually going to jail for folding like a lawn chair to threats about his job security by the Chairman, so much the better. As for the simple matter of how and why the President can so blatantly interfere in State affairs, and specifically nudging the direction of popular elections, which ultimately are the domain purely of US citizens, it is likely that nobody will care.

Submitted by Tyler Durden on 09/19/2009

Source: ZeroHedge

Banksters Paid $32.6 Billion in Bonuses Amid US Bailout

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July 30 (Bloomberg) — Citigroup Inc., Merrill Lynch & Co. and seven other U.S. banks paid $32.6 billion in bonuses in 2008 while receiving $175 billion in taxpayer funds, according to a report by New York Attorney General Andrew Cuomo.

Cuomo analyzed 2008 bonuses at nine banks that received Trouble Asset Relief Program financing from the U.S. government. New York-based Citigroup and Merrill, which has since been taken over by Bank of America Corp., received TARP funding totaling $55 billion, Cuomo said.

Read moreBanksters Paid $32.6 Billion in Bonuses Amid US Bailout

Hank Paulson admits to threatening Bank of America’s Ken Lewis

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financial-terrorist-henry-paulson
Hank Paulson admitted to threatening Bank of America CEO Ken Lewis when Lewis threatened to pull the plug on the Merrill Lynch merger last fall.
Photo: AP

Former Treasury Secretary Henry Paulson made no bones about it: He did threaten Bank of America CEO Ken Lewis when Lewis threatened to pull the plug on the Merrill Lynch merger last fall.

“I further explained to him that, under such circumstances, the Federal Reserve could exercise its authority to remove management and the board of Bank of America,” Paulson told the House Oversight and Government Reform Committee on Thursday. “By referring to the Federal Reserve’s supervisory powers, I intended to deliver a strong message.”

That admission pretty much blew away the committee’s top Republican, Rep. Darrell Issa of California.

“The inappropriate behavior of government officials did not start or end with the threat to fire Ken Lewis and Bank of America’s board of directors,” Issa said. “It is a threat to the foundations of our free society when government officials, acting in the midst of a crisis, use dire predictions of imminent disaster to justify their encroachment on our individual liberty and the rule of law.”

Related articles:
– Paulson Admits Pressuring Bank of America (ABC News)
– Paulson admits bank merger threat (BBC News)

By MARTIN KADY II
7/17/09 4:21 AM EDT

Source: Politico

Ben Bernanke is a Total Failure Unsuited for Role as Fed Chairman

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Bernanke is ‘the perfect puppet’ and a ‘total success’ for the elitists … but a total disaster for the people.

– Jim Rogers: We are going to have another Depression in the U.S. (Video):
“Mr. Bernanke has never been right. He has been in the government for six or seven years, he has never been right.”

– Marc Faber: Bernanke Is An Economic Criminal And In My Opinion He Is A Madman (06/06/09) (Video)

Such ‘competence’ needs to be rewarded by the other perfect puppet:

– Obama proposals to greatly increase the power of the Federal Reserve


ben-bernanke

Inquiring minds are reading Bernanke Flubs Tryout, Still Up for Leading Role by Caroline Baum.

Most often I agree with Caroline, but not this time.

After trashing (and rightfully so) Bernanke’s last appearance before Congress, Caroline somehow arrives at the following conclusion.

It would be hard to find someone more suited for the job of Fed chairman than Bernanke. His performance yesterday has nothing to do with his unique qualifications for the position. … Unless President Barack Obama wants a solo pilot, he would do well to tap Bernanke for a second term.

Let’s take a look at the qualifications of which Baum speaks.

Ten Qualifications

1) Bernanke is either a liar or has a memory problem. I believe the former. Either way, there is a problem when a Fed chairman cannot recall a conversation with another Fed governor over something as critical as the Bank of America/Merrill Lynch merger. See Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America “Turd in the Punchbowl” for my take.

2) Bernanke claims to be a student of the great depression yet amazingly concludes the cause was misguided Fed policy after the stock market crash. This is nonsense. The cause of the great depression and the cause of the current depression (yes we are in a depression), is the massive expansion of credit and debt fostered by the Fed itself. Bernanke is no student of history, he is a dunce.

3) Bernanke has on many occasions promised transparency. This is an outright lie. There is no transparency and Bloomberg has filed freedom of information lawsuits requesting information that should have been disclosed. Moreover, Congress had to subpoena the Fed in regards to the Bank of America / Merrill Lynch shotgun wedding which is how we know about Bernanke’s selective memory loss. What else is Bernanke hiding?

Read moreBen Bernanke is a Total Failure Unsuited for Role as Fed Chairman

US government forced Bank of America to buy Merrill and conceal rescue facts

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Pressure from Fed and Treasury chiefs to complete purchase of Merrill Lynch despite ‘staggering’ losses


Merrill Lynch Chairman and CEO John Thain, left, shakes hands with Bank of America Chairman and CEO Ken Lewis, at a news conference last autumn. The deal between the banks has proved controversial Photo: AP

Ken Lewis’s position at the helm of Bank of America looked increasingly uncertain on Thursday after it emerged he stopped short of pulling out of the deal to buy loss-making Merrill Lynch after Treasury Secretary Hank Paulson threatened to oust him and his entire board.

Mr Lewis BoA’s chairman and chief executive, also knowingly hid the state of Merrill Lynch’s “staggering” losses from shareholders at the behest of former Treasury Secretary Paulson and Federal Reserve chairman Ben Bernanke.

The revelations were contained in a batch of BoA board minutes and testimony from Mr Lewis and Mr Paulson sent by New York Attorney General Andrew Cuomo to the Securities and Exchange Commission and Congressional leaders Chris Dodd and Barney Frank.

Bank of America chief ‘told to buy Merrill or face sack’

Bank boss claims US treasury told him to seal $50bn deal and keep quiet about brokerage’s huge losses

The US government threatened to eject the entire board of Bank of America if the firm pulled out of a $50bn (£34bn) takeover of troubled Merrill Lynch in December, according to new documents set to inflame a bitter shareholder dispute at America’s wealthiest bank.

In potentially explosive testimony to regulators, Bank of America’s chief executive, Ken Lewis, has claimed the US treasury ordered him to press ahead with a buyout of Merrill and to keep quiet about the Wall Street brokerage’s mounting losses.

Full article here: The Guardian

Mr Cuomo, who released details of the exchanges yesterday, has been investigating BoA after Merrill paid $3.6bn (£2.45bn) of bonuses to its staff just days before the acquisition was completed on January 1.

He believes he has uncovered “facts that raise questions about the transparency” of the Treasury’s $700bn bank bail-out programme “as well as about corporate governance and disclosure practices at Bank of America.”

Investors have already expressed serious concern that BoA did not attempt to pull out of the merger with Merrill, given the investment bank racked up losses of $15.84bn in the fourth quarter of 2008. The loss required BoA to take on an extra $20bn of Treasury funding as well as an $118bn loan-loss guarantee.

The documents paint all three men in a bad light. Mr Lewis, though initially keen to pull out of the Merrill deal after revealing the extent of what he calls the “staggering amount of deterioration in its finances,” claimed he caved in after being threatened by Mr Paulson on December 21, ten days before the sale was due to complete.

“That makes it simple. Let’s deescalate,” Mr Lewis told Mr Paulson, with reference to his original plan to invoke a material adverse clause (MAC) to get out of the Merrill deal.

Mr Paulson later testified to Mr Cuomo that he only threatened Mr Lewis “at the request of Chairman Bernanke.”

Read moreUS government forced Bank of America to buy Merrill and conceal rescue facts

AIG Discloses Counterparties as Obama, Cuomo Assail Bonuses

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This time the bailout money from the U.S. taxpayer went to:
Goldman Sachs led beneficiaries, with $12.9 billion, followed by SocGen, France’s No. 3 bank, with $11.9 billion, and Deutsche Bank, Germany’s biggest lender, with $11.8 billion. Barclays Plc received $8.5 billion from AIG, Merrill Lynch & Co. got $6.8 billion, Bank of America Corp. got $5.2 billion and UBS AG got $5 billion.

“I was happy to see that AIG finally handed over the counterparty information we’ve been requesting for months,” said Representative Elijah Cummings, a Maryland Democrat on the House Oversight Committee. “However, I am deeply concerned that Goldman Sachs received so much money from AIG considering the relationships between the two companies. We will certainly be investigating this further to ensure that this is merely a coincidence.”


A pedestrian walks past the Societe Generale SA company logo in Paris

March 16 (Bloomberg) — American International Group Inc., bailed out four times by taxpayers and under pressure to show what it’s doing with the money, disclosed which banks and states got $105 billion of U.S. funds and may have to name some of the employees splitting $1 billion in retention pay.

President Barack Obama called AIG’s $165 million of retention bonuses handed out yesterday unwarranted and vowed to block or recover them. Andrew Cuomo, New York State’s attorney general, demanded names of the recipients and said he’d send a subpoena if New York-based AIG didn’t respond by 4 p.m.

“It’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay,” said the text of Obama’s White House speech today. “How do they justify this outrage to the taxpayers who are keeping the company afloat?”

AIG has been pressed to reveal its inner workings since the U.S. took a stake of almost 80 percent last year to avert a collapse of the insurer, once the world’s biggest. Yesterday, AIG said U.S. states and banks led by Goldman Sachs Group Inc., Societe Generale SA and Deutsche Bank AG were among those that benefited from the rescue, now valued at $173 billion.

Read moreAIG Discloses Counterparties as Obama, Cuomo Assail Bonuses

Bank of America Says Bonus Disclosure Will Cause ‘Grave’ Harm

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March 5 (Bloomberg) — Disclosing the identities of Merrill Lynch & Co. employees who were paid $3.6 billion in bonuses just before the firm merged with Bank of America Corp. will cause “grave and irreparable harm,” said lawyers for the companies.

Bank of America today filed documents in state court in Manhattan to intervene in a case brought by New York Attorney General Andrew Cuomo to compel former Merrill Chief Executive Officer John Thain to testify about the bonus recipients.

Read moreBank of America Says Bonus Disclosure Will Cause ‘Grave’ Harm

CORRUPTION-US: How Wall Street and Washington Betrayed America

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WASHINGTON, Mar 4 (IPS) – A new report says that Wall Street has only itself to blame for the misguided deregulation that led to the current deepening financial crisis.

Issued Wednesday by Essential Information and the Consumer Education Foundation, the report documents billions of dollars spent by the financial sector on what would eventually be their own downfall.

The 231-page report, “Sold Out: How Wall Street and Washington Betrayed America,” shows that the financial sector invested more than 5 billion dollars on purchasing political influence in Washington over the past decade, with as many as 3,000 lobbyists winning deregulation and other policy decisions that led directly to the current financial collapse.

“The report details, step-by-step, how Washington systematically sold out to Wall Street,” said Harvey Rosenfield, president of the California-based non-profit organisation Consumer Education Foundation.

“Depression-era programmes that would have prevented the financial meltdown that began last year were dismantled, and the warnings of those who foresaw disaster were drowned in an ocean of political money,” he said. “Americans were betrayed, and we are paying a high price – trillions of dollars – for that betrayal.”

Read moreCORRUPTION-US: How Wall Street and Washington Betrayed America

Almost 700 Merrill Lynch executives paid $1m-plus bonuses

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Nearly 700 Merrill Lynch executives had cash bonuses of more than $1m each for last year, New York’s top law enforcement official disclosed on Wednesday.

Andrew Cuomo, New York’s attorney-general, called the bank’s decision to bring forward nearly $4bn of pay-outs a “surprising fit of corporate irresponsibility” that raised “serious and disturbing questions”.

Mr Cuomo said the bonuses for 2008 were “disproportionately distributed to a small number of individuals”, with the top four recipients taking in a combined $121m.

Mr Cuomo launched an investigation into the payments at Merrill Lynch after the Financial Times reported last month that Merrill accelerated its bonus payment schedule in December, even as its losses were approaching record levels. He detailed some of the investigation’s findings on Wednesday in a letter to the House financial services committee.

Read moreAlmost 700 Merrill Lynch executives paid $1m-plus bonuses

BofA had role in Merrill bonuses

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“In the wake of Mr Thain’s dismissal last week, sales and trading chief Tom Montag, his top deputy, received a promotion. Mr Montag’s department was responsible for at least half of Merrill’s $15bn loss in the fourth quarter.”

“People familiar with the matter point out that a clause in Mr Montag’s contract specifies that, if his authority was diminished in certain ways, he would be allowed to leave the bank with a hefty severance package.”

Banksters!

Bank of America played a role in Merrill Lynch’s controversial decision to pay $4bn in bonuses in December just as mounting losses were threatening to derail BofA’s takeover of the Wall Street firm, according to people close to the situation.

BofA has said that the payment of $4bn in compensation in a fourth quarter in which Merrill racked up $15bn in losses was sanctioned by John Thain, Merrill’s chief executive.

Ken Lewis, BofA’s embattled chief executive, ousted Mr Thain on Thursday after news of the bonus payments appeared in the Financial Times. BofA told the FT last week that Mr Thain had made the decision to pay bonuses in December instead of January and it had been “informed” of the move. The bank said Merrill was an independent company until the deal closed on January 1.

However, a person familiar with Mr Thain’s actions said the ousted chief had at least two conversations with BofA’s chief administrative officer, J. Steele Alphin, one of the bank’s most senior executives, before a December 8 board meeting at which Merrill’s bonus payments were approved.

This person said Mr Alphin recommended, and Mr Thain accepted, a proposal to change Merrill’s incentive compensation mix – 60 per cent cash and 40 per cent stock – to conform with BofA’s system of 70 per cent cash and 30 per cent stock. The stock portion of the payouts was made January 2, the day after the deal closed, in BofA stock.

Read moreBofA had role in Merrill bonuses

Merrill banksters paid bonuses as losses mounted ahead of sale to BofA

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More bonuses for total failure:

“Despite the magnitude of the losses, Merrill had set aside $15bn for 2008 compensation…”

“The bulk of $15bn in compensation was paid out as salary and benefits throughout the course of the year. A person familiar with the matter estimated that about $3bn to $4bn was paid out in bonuses in December.”

I have posted so much evidence that it should be obvious now that the entire financial crisis is fabricated by the elite to loot the taxpayers’ until there is nothing left and to bankrupt the U.S.

The majority of the banksters are not even aware of what the elite is planning, but many billionaires have already left the U.S. and they knew that they had to be gone by early 2009.

Merrill paid bonuses as losses mounted ahead of sale to BofA

Merrill Lynch took the unusual step of accelerating bonus payments by a month last year, doling out billions of dollars to employees just three days before the closing of its sale to Bank of America.

The timing is notable because the money was paid as Merrill’s losses were mounting and Ken Lewis, BofA’s chief executive, was seeking additional funds from the government’s troubled asset recovery programme to help close the deal.

Merrill and BofA shareholders voted to approve the takeover on December 5. Three days later, Merrill’s compensation committee approved the bonuses, which were paid on December 29. In past years, Merrill had paid bonuses later – usually late January or early February, according to company officials.

Within days of the compensation committee meeting, BofA officials said they became aware that Merrill’s fourth-quarter losses would be greater than expected and began talks with the US Treasury on securing additional Tarp money.

Last week, BofA said it would be receiving $20bn in Tarp money, in addition to the $25bn that had been earmarked for it and Merrill last year. It was then revealed that Merrill had suffered a $21.5bn operating loss in the fourth quarter.

Despite the magnitude of the losses, Merrill had set aside $15bn for 2008 compensation, a sum that was only 6 per cent lower than the total in 2007, when the investment bank’s losses were smaller.

The bulk of $15bn in compensation was paid out as salary and benefits throughout the course of the year. A person familiar with the matter estimated that about $3bn to $4bn was paid out in bonuses in December.

Nancy Bush, an analyst with NAB Research, described the size of the 2008 Merrill bonus payments as “ridiculous”.

Read moreMerrill banksters paid bonuses as losses mounted ahead of sale to BofA

Global Economic Crisis Accelerating

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– Jim Rogers: ‘UK has nothing to sell’ (Financial Times):
 “The City of London is finished, the financial centre of the world is moving east.”

– Jim Rogers: Obama administration run by people who caused the latest financial problems (BBC News)

– The Obama Stimulus Plan Won’t Work (Lew Rockwell)

– SERIOUSLY ALARMED (Telegraph):
(Even Mr. Ambrose Evans-Pritchard is now alarmed!)

– King paves way to start Bank print presses (Times Online)

– Sterling hits 23-year low against dollar (Financial Times)

– Geithner pledges ‘dramatic’ action (Financial Times)

– Portugal says S&P downgrade due to global crisis (Reuters)

– Singapore Economy May Post Biggest Decline on Record (Bloomberg)

– Emerging markets face $180 bn investment decline (Business Standard)

– French government to pump €6bn into ailing car industry (Guardian)

– Japan’s ‘Severe’ Recession May Last Three Years, Yoshikawa Says (Bloomberg)

– BHP Billiton to cut 6000 jobs and close mine (Times Online)

– Eaton to Cut 5200 Jobs in a 2nd Wave of Reductions (Bloomberg)

– Record redundancies push unemployment to 1.92 million (Times Online)

– Ecuador to Cut $1.5 Billion in Imports to Defend Use of Dollar (Bloomberg)

– Ex-Scots bankers could face Holyrood inquiry (Times Online)

– Ireland’s Banks Sink With Decline of ‘Celtic Tiger’ (Bloomberg)

– Patrick Rocca, ‘poster boy’ of Ireland’s Celtic Tiger, kills himself (Times Online)

– Bankers accused in crisis could face trials in US (Guardian)

– Hedge Fund Run by Ex-Car Salesman Is Scam, SEC Says (Bloomberg)

– Federal Home Loan Banks may have to borrow from US (Los Angeles Times)

– Merrill Clients Pulled $10 Billion in Fourth Quarter (Bloomberg)

– Standard Life investors demand compensation after ‘cash’ fund invests in toxic debt (Telegraph)

– Toyota Tops GM in Global Car Sales in 2008 (Washington Post)

– Citigroup Makes Stock Incentive Awards to Executives (Bloomberg)

Bank of America Receives $138 Billion of Rescue Funds

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– Paul Craig Roberts On The U.S. Leadership: “They Are Criminals” – The Potential Here Is Far Worse Than The Great Depression:
Paul Craig Roberts served as an Assistant Secretary of the Treasury in the Reagan Administration earning fame as the “Father of Reaganomics”. He is a former editor and columnist for the Wall Street Journal, Business Week, and Scripps Howard News Service. In 1992 he received the Warren Brookes Award for Excellence in Journalism. In 1993 the Forbes Media Guide ranked him as one of the top seven journalists in the United States.

– Paul Craig Roberts: Our Collapsing Economy:
According to the methodology used in 1980, the US unemployment rate in December 2008 reached 17.5 percent.
Yes, “our” government lies to us about economic statistics, just as it lies to us about “terrorists,” “weapons of mass destruction,” “building freedom and democracy in the Middle East,” and the Israeli-Palestinian conflict.
An objective person would be hard pressed to find any statement made by the US government that is reliable.

Jan. 16 (Bloomberg) — Bank of America Corp., the largest U.S. bank by assets, received a $138 billion emergency lifeline from the government to support its acquisition of Merrill Lynch & Co. and prevent the global financial crisis from deepening.

The U.S. will invest $20 billion in Bank of America and guarantee $118 billion of assets “as part of its commitment to support financial-market stability,” the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. said in a joint statement shortly after midnight in Washington.

The bailout raises doubts about the future of Chief Executive Officer Kenneth D. Lewis, who engineered the takeovers of New York-based brokerage Merrill Lynch and mortgage lender Countrywide Financial Corp. during the worst market slump since the Great Depression. Bank of America has plummeted 75 percent in New York trading since the Merrill acquisition was announced in September, falling to the lowest level in almost two decades.

“This thing is unraveling so fast Lewis may know his job is lost,” said Paul Miller, an analyst at Friedman Billings Ramsey Group Inc. in Arlington, Virginia, who has an “underperform” rating on Bank of America. The management team has “lost credibility” after spending more than $20 billion in the past year to buy unprofitable Merrill and ailing mortgage lender Countrywide Financial Corp. of Calabasas, California, he said.

(The Bank of America did not ‘want’ to buy Merrill. It had to buy Merrill. This is all part of a bigger plan to loot US taxpayers’, destroy the middle class, the dollar and the economy and create the greatest depression ever.)

Read moreBank of America Receives $138 Billion of Rescue Funds

Global Economic Crisis Accelerating

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– UK jobless rise of 40000 in a week just ‘tip of the iceberg’ (Telegraph)

– Schwarzenegger Says Deficit has ‘Incapacitated’ State (Bloomberg):
Jan. 15 (Bloomberg) — Governor Arnold Schwarzenegger said California has been so “incapacitated” by a fiscal crisis that threatens to leave it unable to pay bills within weeks that the only issue he and lawmakers must consider is how to fix it.

– Charter misses $74 mln in debt interest payments (Reuters):
NEW YORK, Jan 15 (Reuters) – Charter Communications, the fourth largest U.S. cable operator, said on Thursday it missed interest payments of $73.7 million as it continues to negotiate a debt restructuring with bondholders.
The company said it has until Feb. 15 to make the payment and avoid default, which could push it into bankruptcy.

– ECB cuts rates by 50 points to 2% (Financial Times):
Eurozone interest rates fell by half a percentage point to their lowest in more than three years on Thursday as the European Central Bank said that it expected the recession to deepen and signalled that borrowing costs could fall further.
Jean-Claude Trichet, ECB president, warned that growth forecasts published only last month would have to be revised downwards in a sign of the ferocity of the downturn.

– Pfizer May Fire 2,400, One-Third of U.S. Sales Force (Bloomberg):
Jan. 15 (Bloomberg) — Pfizer Inc., the world’s biggest drugmaker, may fire almost a third of its U.S. sales force, or as many as 2,400 workers, in a plan under consideration by senior management, people familiar with the discussions said.h the discussions said.

– JPMorgan chief says 2009 will be bleak (Financial Times):
The US financial and economic crisis will worsen this year as hard-hit consumers default on credit cards and other loans, Jamie Dimon, chief executive of JPMorgan Chase, has predicted in an interview with the Financial Times.

– JPMorgan Profit Drops 76 Percent on Asset Writedowns (Bloomberg)

– Yet another blow to the US newspaper industry (Guardian)

– Aircraft industry shocked by view from ground (Financial Times)

– Airbus forecasts ‘very challenging’ year (Financial Times):
Airbus on Thursday said its new commercial aircraft orders had fallen sharply last year, as the European aerospace group forecast “a very challenging year” for the industry in 2009. Net new orders fell by 42 per cent last year to 777, from a record 1,341 won in 2007.

– Irish government fears IMF intervention (Guardian)

– Ireland plans drastic cuts to prevent debt crisis (Telegraph):
Ireland is to demand pay cuts for civil servants and public employees to prevent the budget deficit soaring to 12pc of gross domestic product by next year – becoming the first country in the eurozone to resort to 1930s-style wage deflation to claw back competitiveness.

– If anyone doubted scale of crisis, work even halts in Dubai on world’s tallest tower (Scotsman)

– Hedge funds ‘encourage bankruptcies’ for profit (Guardian)

– Spain’s Debt Costs Rise at Bond Sale After S&P Alert (Bloomberg)

– Banks gird for commercial property collapse (FinancialWeek):
Some of the biggest financial institutions have huge, potentially troublesome commercial real estate stakes, Standard & Poors data shows. Based on information in their most recent financial reports, Citigroup and Barclays each had more than $20 billion worth of commercial mortgage-related investments. Merrill Lynch, acquired by Bank of America last year, had some $19.7 billion in such investments, according to S&P.

Bank of America to get more billions of government help: WSJ

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Extra billions will help bank digest Merrill acquisition, newspaper says

SAN FRANCISCO (MarketWatch) — The government is close to committing billions in additional aid to Bank of America Corp. to help the giant bank digest its acquisition of Merrill Lynch & Co., the Wall Street Journal reported late Wednesday, citing unidentified people familiar with the situation.

“Even with help from the government, we think Bank of America’s tangible equity levels are low relative to peers and that it will need to cut its dividend and or raise equity capital in the coming months,” Stuart Plesser, a diversified financial services analyst at Standard & Poor’s Equity Research, said.

More:
– BofA may need billions for Merrill – report (CNNMoney)
– Bank of America seeks billions from US to cinch Merrill deal (USA Today)
– Merrill Lynch Turns into a Black Hole for BofA (BusinessWeek)
– BofA, Citi May Need Another Slice Of TARP (Forbes)

Scott Silvestri, a spokesman for Bank of America, declined to comment, as did a Treasury spokeswoman.

The news suggests that the worst of the banking crisis may not have passed. The KBW Bank Index has dropped 19% so far this year. Citigroup lost more than a third of its market value this week as it became clear the bank will try to shrink itself under pressure from big losses.

Bank of America shares dropped 3.3% to $9.87 during after-hours trading on Wednesday. That followed a decline of more than 4% during regular trading.

Read moreBank of America to get more billions of government help: WSJ

Merrill Lynch says rich turning to gold bars for safety

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Merrill Lynch has revealed that some of its richest clients are so alarmed by the state of the financial system and signs of political instability around the world that they are now insisting on the purchase of gold bars, shunning derivatives or “paper” proxies.


Rich investors are spurning gold exchange traded funds in favour of krugerrands.

Gary Dugan, the chief investment officer for the US bank, said there has been a remarkable change in sentiment. “People are genuinely worried about what the world is going to look like in 2009. It is amazing how many clients want physical gold, not ETFs,” he said, referring to exchange trade funds listed in London, New York, and other bourses.

“They are so worried they want a portable asset in their house. I never thought I would be getting calls from clients saying they want a box of krugerrands,” he said.

Merrill predicted that gold would soon blast through its all time-high of $1,030 an ounce, and would hit $1,150 by June.

The metal should do well whatever happens. If deflation sets in and rocks the economic system it will serve as a safe-haven, but if massive monetary stimulus gains traction and sets off inflation once again it will also come into its own as a store of value. “It’s win-win either way,” said Mr Dugan.

Read moreMerrill Lynch says rich turning to gold bars for safety

Bank of America to Cut 30,000 to 35,000 Positions

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Dec. 11 (Bloomberg) — Bank of America Corp., the third- largest U.S. bank, said it plans to cut 30,000 to 35,000 positions over the next three years because of its acquisition of Merrill Lynch & Co. and the weak economic environment.

The final number of job cuts won’t be decided until early next year, the Charlotte, North Carolina-based company said in a statement today. The takeover of the New York-based investment bank is expected to be completed later this month.

Read moreBank of America to Cut 30,000 to 35,000 Positions

Merrill CEO says economic environment recalls 1929 – UPDATE 2

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(Recasts; adds Thain comments, share prices, byline)

NEW YORK, Nov 11 (Reuters) – Merrill Lynch & Co (MER.N: Quote, Profile, Research, Stock Buzz) Chief Executive John Thain said the global economy is in a deep slowdown and will not recover quickly, and the environment recalls 1929, the advent of the Great Depression.

Speaking Tuesday at his bank’s annual financial services conference, Thain said he was “cautiously optimistic” about the outlook for the industry. But he said credit remains constricted and asset prices generally are still falling.

“The U.S. economy is contracting very rapidly,” creating uncertainty “at least over the next few quarters,” Thain said. “We are going to be in a very difficult economic environment for a significant period of time.”

Conditions deteriorated as the U.S. housing market collapse mushroomed into a more general crisis of confidence.

Read moreMerrill CEO says economic environment recalls 1929 – UPDATE 2

Wall Street jobs axe threatens 70,000

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The financial industry is bracing for a fresh round of job cuts as Wall Street banks slash costs to cushion the blow of further market turbulence and deepening economic woes in 2009.

Executives and analysts say the redundancies – to be finalised this month as banks prepare next year’s budgets – could top 70,000 among US groups alone and add to the estimated 150,000 jobs already lost by the financial sector worldwide.

The job losses are expected to be concentrated in the investment banking and trading businesses that have been hit hard by the near-freeze in capital markets and the collapse in takeover and financing activity.

The continued shrinking of the banking industry will deepen the economic plight of financial centres such as New York, London and Hong Kong by reducing tax revenues and putting pressure on the local housing market.

“The fourth quarter is going to be very disruptive,” Meredith Whitney, analyst at Oppenheimer, said in a video interview with the Financial Times. “For many of the capital markets intensive players, you’re going to have resizing of anywhere from 25 to 30 per cent of their workforce. But if you think about it, from the peak, revenues are down more than that.”

Read moreWall Street jobs axe threatens 70,000

Rescued RBS to pay millions in bonuses

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RBS ‘making monkeys’ out of the government, says Vince Cable


Royal Bank of Scotland. Photograph: Newscast

Royal Bank of Scotland, which is being bailed out with £20bn of taxpayers’ money, has signalled it is preparing to pay bonuses to thousands of staff despite government pledges to crack down on City pay.

The bank has set aside £1.79bn to cover “staff costs” – including discretionary bonuses – at its investment banking division for the first six months of the year alone. The same division caused a £5.9bn writedown that wiped out the bank’s profits for the same period.

The government had demanded that boardroom directors at RBS should not receive bonuses this year and the chief executive, Sir Fred Goodwin, is walking away without a pay-off. But below boardroom level, RBS and other groups are preparing to pay bonuses to investment bankers who continue to generate profits.

Read moreRescued RBS to pay millions in bonuses

Broken Securities Industry Still Has $20 Billion to Pay Bonuses

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Oct. 27 (Bloomberg) — Five straight quarters of losses and a 70 percent slide in its stock this year haven’t stopped Merrill Lynch & Co. from allocating about $6.7 billion to pay bonuses.

Goldman Sachs Group Inc. and Morgan Stanley, both still on track for profitable years, have set aside about $13 billion for bonuses after three quarters, down 28 percent from a year ago. Even some employees at Lehman Brothers Holdings Inc., which declared the biggest bankruptcy in U.S. history last month, will get the same bonus they received a year ago.

The worst financial crisis since the Great Depression, a $700 billion taxpayer bailout, public outcry over excessive pay and the demise of three of the biggest securities firms won’t deter Wall Street from offering year-end rewards to employees on top of their salaries, compensation experts say.

“Critical producers and critical managers will be retained with the same bonus they had last year,” said Robert Sloan, head of U.S. financial-services recruiting at Egon Zehnder International, a New York-based executive-search firm. “The others will see sharp cuts.”

Goldman, the biggest and most profitable Wall Street firm until it opted to become a bank holding company last month, has set aside about $6.85 billion for bonuses, or an average of $210,300 for each employee, down 32 percent from $339,400 a year ago. Morgan Stanley, the second-biggest securities firm until it also converted to a bank, has $6.44 billion for bonuses, or $138,700 per person, down 20 percent from last year. Both firms accrue a fixed percentage of their revenue for compensation, so the decline in bonus pools matches the drop in revenue.

Merrill’s Compensation

The money Merrill has set aside for bonuses equates to an average $110,000 for each of its 60,900 people, up from $108,000 a year ago because more than 3,000 jobs have been cut.

Read moreBroken Securities Industry Still Has $20 Billion to Pay Bonuses

Georgia’s Alpha Bank & Trust Seized as U.S. Closings Rise to 16

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Oct. 25 (Bloomberg) — Alpha Bank & Trust in Alpharetta, Georgia, with $346 million in deposits, was seized by regulators and closed as the collapse of the housing market and loan defaults claimed a 16th U.S. bank this year.

Alpha, with $354 million in assets, was shut by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corp. sold the deposits to Stearns Bank N.A., of St. Cloud, Minnesota. Alpha’s two offices north of Atlanta will open on Oct. 27 as branches of Stearns Bank, the FDIC said yesterday.

Regulators have closed the most banks in 15 years, and the collapses of Washington Mutual Inc. and IndyMac Bancorp Inc. were among the biggest in history. About 4.4 percent of Alpha’s assets were defaulted real-estate loans it took back on its balance sheet, quadruple the total for most U.S. banks, based on data compiled by Charlottesville, Virginia-based SNL Financial.

Read moreGeorgia’s Alpha Bank & Trust Seized as U.S. Closings Rise to 16

Merrill Chief Thain Expects Thousands of Job Cuts

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Oct. 20 (Bloomberg) — Merrill Lynch & Co. Chief Executive Officer John Thain said he expects “thousands” of job losses from the bank’s $50 billion takeover by Bank of America Corp.

Most of the cuts will fall in information technology, operations and “corporate functions,” Thain, 53, said in a Bloomberg Television interview in Dubai today. Jobs in the fixed income and commodities divisions won’t be eliminated after the deal, he said.

“We haven’t mapped it out in terms of actual number of people, but we are committed to saving $7 billion across the combined platforms, and that will be a challenge,” Thain said. “Between our two companies it will be clearly thousands of jobs.”

Read moreMerrill Chief Thain Expects Thousands of Job Cuts

Citigroup’s $13bn writedown raises fears of a crisis beyond Wall Street

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America’s leading banks continued to announce hefty losses yesterday as Citigroup reported a further writedown of more than $13 billion (£7.5 billion) for the third quarter and Merrill Lynch took another $9.5 billion hit.

The latest writedowns brought Citigroup’s total hit from the credit crunch to about $60 billion and left it with an overall group loss, of $2.8 billion, for the fourth consecutive quarter.

Merrill Lynch, which has clocked up about $50 billion of credit-crunch related charges, reported its fifth consecutive quarterly group loss, of $5.15 billion, for the third quarter. The group agreed a fire sale to Bank of America last month to boost its capital reserves.

Citigroup’s loss was larger than the $2.2 billion deficit the bank recorded the year before, but considerably smaller than the $3.8 billion loss analysts had collectively forecast for the period. Group revenues fell 23 per cent to $16.7 billion.

Although Citigroup’s results came in ahead of expectations, analysts were concerned that they provided further evidence that the financial crisis was spreading from Wall Street to Main Street.

Read moreCitigroup’s $13bn writedown raises fears of a crisis beyond Wall Street